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Wednesday 23.08.2017 | Name days: Valgudis, Ralfs, Vitālijs

Opinion: revenue of ports - for the state or handful of individuals?

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUEven though the average monthly salary of representatives of the largest ports in Latvia ranges between LVL 1,500 – LVL 2,000, the idea of having to share port profits by means of diverting money to other industries – infrastructure, education and medicine – seems unacceptable to them, says advisor to the Economy Minister Ilona Platonova.

This is why, according to her, “it would be refreshing to invite teachers, doctors and police officers to the next gathering of the Ports Council, government coalition or any similar meeting and see if their opinion coincides with that of the head of Riga Freeport Leonid Loginov, Executive Director of Latvian Ports Association Karlis Leiskalns or that of the head of Riga Port Council Andris Ameriks”, as reported by Delfi.

According to the conclusion of the State Audit, during the period of 2009 to 2011 alone, Riga Freeport had misappropriated LVL 41 million. As a comparison – in order to increase salaries for all teachers for 10-20% or raise salaries for doctors, only LVL 14 million are necessary.

Ports – treasure of Loginov, Leiskalns and Ameriks or that of the Latvian state?

If Latvia’s natural “treasures” – forests, waters, fertile soil and Latvia’s geographical location as a “bridge” between the West and the East – what about ports?

“At the moment, one such manager of state treasure – Latvijas valsts meži (Latvia’s State Forest) – maintains the country’s forest and pays dividends and corporate income tax to the state budget. A number of state capital associations had transferred 90% of their profits to the state budget in 2012,” – Platonova notes.

All institutions are equal, but some are more equal than others

It is noted that one of the counter-arguments used by port representatives is that it is impossible for port revenue to be transferred to the state budget because of the flawed legislation.

This did not, however, prevent the Law on Ports to exist for years and retain a regulation that allowed municipalities to collect 10% of ports’ profits. Why not collect contributions to the state budget as well? Especially considering that ports use both state-owned land and municipal infrastructure.

Generous bonuses and donations guarantee port competitiveness

Platonova notes that, according to Loginov, Leiskalns and Ameriks, the main reasons behind the competitiveness of Latvia’s ports are the generous donations, bonus money and concert sponsoring activities.

“It is clear that we should expect the unveiling of some new marketing trick when, for example, Ventspils port will claim first prize in some international contest with its project – “Thomas Anders’ concert influence on the development of ports”. The concert cost “only” LVL 100 thousand, by the way,” – the advisor adds.

“Private box in Arena Riga, luxurious vehicles for social relation specialists and other relatives of management Board members – these things make life better for a handful of high port workers. And, of course, they will claim that losing these extras is a bad thing. They believe this even though this step will improve life for hundreds of thousands of Latvians. Saving one’s own hide will always be more important,” – Platonova says.

Tallinn can. Why can’t we?

While the higher-ups of Latvia’s ports claim the division of profits would spell catastrophe, neighbours – Tallinn Port – has been transferring such payments to the budget of its home state many years.

“Tallin Port pays the state both dividends and taxes. This way the state gains income from its owned company, which, by the way, uses the state’s infrastructure. Aside from that, it is also a great way to show how professional management can achieve results and develop port infrastructure as one of the foundations of state economy,” – Platonova emphasizes.

“The bill regarding the transfer of payments for the use of infrastructure – I underline payments, not taxes – will be submitted for review for review to the coalition partners in the next couple of days. I want to hope that other political forces, especially the head of the government, will respect their people and will think first about hundreds of Latvia’s residents, not a handful of chosen port employees,” – the advisor concludes.


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  1. Oddis says:

    Who owns this ports? Aren’t they private property?

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